SaaS customer retention is all.

A SaaS must be able to acquire customers and retain customers to be successful. Retention is cheaper than acquisition so the best and most cost-effective strategy is to… you guessed it… hold on to your customers!

Customers who are already customers are the ones that make the most money. Groove estimates that there is a 2 to 5 percent chance of selling to a prospect. How about your current customers? There is a 60% to 70% chance that you will sell!

Existing customers can be a lifeline for cash, value, and money.

Profitability is all about retention. Churn is the number one enemy of the public. The question is how can you retain customers?

I have many strategies that you can use, and I am happy to share them with you. These strategies work. Why? Because I am not just giving you gimmicks.

I’m giving you real business-altering approaches that transform you from a customer-in/customer-out churn machine, and into a customer retention unicorn.

1. Raise your price.

Higher prices create a perception that the product is more valuable. Once the customer spends the money, such a perception becomes a reality. They have already committed to a cost and it is shown on their balance sheet.

The customer will be more likely to purchase the product once they have invested (engagement). Customer retention is largely determined by customer engagement. This has effectively increased customer engagement and decreased the chance of them canceling.

2. Reconsider your value proposition.

Your customer became a customer because of this reason. Although you may not be able to pinpoint the exact reasons for each customer, it is possible to get a sense of why they chose you by understanding your unique selling proposition and value proposition.

It is the reason why the customer chose you. Likely, they are still with your company because of the value that you provide.

You can make any changes necessary to ensure that your value proposition is still relevant to your client.

3. Reassess your value proposition.

Just in case they forget, remind them. The value proposition that attracted a client should also be successful in keeping them satisfied.

Email marketing and frequent contact with clients can help you keep your value proposition in mind. Your value proposition will be more convincing if they can see it and experience it. They will also stay committed.

4. Analyze again the onboarding process.

Customer retention should be based on what attracted them to your company in the first place.

Take a look at your onboarding process and see which features are most appealing to potential customers. These traits will ensure customers are satisfied in the long-term.

5. Follow up on all interactions with customers

This is not about service requests. After the customer has solved their problem, I am talking about going above and beyond.

This is a typical service request and its solution:

1. Customer: There is a problem.
2. Support Team: I have helped you. Have a great day.

It is a good idea to add another layer of follow-up to this process.

1. Customer: There is a problem.
2. Support Team: I have helped you. Have a great day.
3. Bonus Follow-Up How is everything going? Do you have any other questions?

What does that mean for customer service? You’re not only solving the problem but also making sure the customer is happy. Solving problems is as important in customer retention as making customers happy.

6. Avoid customer satisfaction surveys or other unnecessary surveys.

Let me add to the above point by discussing a common situation.

This is often the case that I see.

1. Customer: There is a problem.
2. Support Team: I have helped you. Have a great day.
3. Annoying Follow-Up: Please fill out this survey. We understand that you are annoyed by the problem. But now, fill out this survey. Please. Please. Please.
4. Customer: (Ignores this dang survey.
5. You can get a bonus annoying follow-up by filling it out! Huh?! Why not? Get on it!

What is the outcome of this exchange? The customer isn’t happy. The customer is not happy. No. They’re annoyed. Their perspective is that you care more about your survey than you do about their productivity or well-being.

Surveys can be a double-edged sword. You might be able to get valuable and important data. You might also be able to tick off some people. I prefer to gain data through customer usage rather than going through the survey route.

Phone calls are another way to get valuable data. As you make your rounds calling clients, be sure to ask them some diagnostic questions. This will help you assess the SaaS’s performance and the client’s experience.

Customer satisfaction surveys are all evil. Not always. They can be risky. A survey may reduce customer satisfaction.

7. Upsell.

SaaS upsell refers to engaging an existing client at a deeper level. They pay you more if your service level is higher. Your profits will increase if your price upsells correctly.

Upselling has three great benefits: 1) it deepens relationships; 2) it raises the customer’s value; 3) it increases the customer’s lifetime value (CLV).

Upselling should not be viewed as a dirty word or a tactic to make extra money from gullible customers. Upselling is a win/win situation. Customers get better stuff. You get more cash. Here’s the best part: Customers will stay longer.

It is time to see upsells as a retention strategy.

8. Engage as soon as you can.

Engaging customers is the best way to increase your churn rates. Lincoln Murphy defines engagement as “when your customer is realizing the value of your SaaS.”

What is the best way to help customers get value out of your SaaS? Use it. Do whatever you can to convince your customer to use your product. You can reach customers by email, phone, encouraging calls, and bribery.

They will realize the value of it faster if they get it used sooner. They are less likely to give up if they have realized value sooner.

9. Develop a regular interaction schedule.

As often as possible, interact with customers. It all depends on the size and nature of your SaaS. You need to be able to interact with customers if you are offering enterprise-level services that cost thousands of dollars monthly.

Do not call them just to upsell. Call them for billing issues, not upsells. They should be called to be amazing. Call them to say hello. Call them so that they can vent if necessary. If you create a partnership approach, you will lose far fewer clients.

10. Send targeted tips

Create an email that is sent to customers when they complete a significant action within the SaaS.

If a customer creates a bill in your bookkeeping software, send them an automated email saying, “Hey, that’s easy. You might also want to share your YouTube video or point them at an article that will help them create invoice templates.

You can increase your value and lose fewer customers with simple techniques such as these.

11. Offer free training

Users will be more interested in learning about the power of complex software. To help users get the most out of SaaS, offer free webinars and training sessions.

This approach has many benefits. You’re increasing customer satisfaction by offering SaaS. You’re also building a stronger relationship with your customer. These features can reduce churn.

12. Get feedback.

Customers who suggest improvements are investing in the company’s existence and life. They feel ownership.

This is why feedback should be a key part of your retention strategy. This is not a suggestion box hidden in a dark corner of your website. Instead, invite customers to make changes on your pricing page.

13. Customers need immediate attention

It is your goal to respond within 24 hours to all customer inquiries. Reduce the time it takes to respond if it is during work hours. Customers deserve your immediate attention.

14. Follow your customers on social networks

Follow your customers on social media. This serves two purposes. You make them feel valued and appreciated. You can listen to them and then respond to their feedback.

One VentureBeat article explains the issue clearly:

The customer success team monitors social media constantly to ensure that they respond quickly to any feedback or inquiries. Many users praise companies for their fast responses on Twitter and Facebook.

15. To interact in multiple ways, and create social profiles.

Your customers will be more engaged if you maintain regular contact with them. You should have a strong social presence to ensure that your customers can see you and reach you via whatever medium they choose.

Although social media isn’t strictly a retention strategy it can help to increase awareness about your SaaS among customers. This awareness can increase engagement. Engagement, as you know, is the best way to lower churn rates.

16. You might consider a loyalty program.

Loyalty programs work. A simple loyalty program is a great way to keep your customers coming back.

To be successful, a loyalty program does not need to be costly or complex. Simple rewards such as a discount or gift card are often enough to let users know they are valued and appreciated.

17. Make progress towards a goal.

Psychologists discovered that people feel happier and more fulfilled when they work towards a goal.

This truth can be applied to your whole life, or it can be applied to SaaS. SaaS users who work toward a goal develop an intense desire to interact with the SaaS.

This is most evident in games, where users can achieve new rankings and levels. The same applies to non-game applications. For example, LinkedIn shows a user’s progress in filling out their profile. Users can earn badges by using the Audible App to listen to audiobooks at a specific time or follow certain patterns.

You can delight customers by focusing on simple goals. This will help you retain them better and decrease churn.

18. Establish a retention team.

It is a sign that you care about customer retention if you have a retention team.

A retention team gives you a dedicated resource to engage with clients.

You can retain your customers by tackling the issue of turnover more aggressively.

19. Customer engagement can be measured

Customer engagement, as we have already stated, is the most important predictor of retention.

This is why it’s so important to not only encourage engagement but also to measure it. Whether you’re creating a customer success roadmap or performing cohort analysis, it is important to collect the data that tells a story. 

20. Set customer expectations.

Let’s ask a simple question to get at the core of this article. Why would a customer want to leave?

One reason is that their expectations weren’t met.

How can you influence that factor? Is the customer’s problem their problem? Wrong. This is your problem. You are responsible for setting customer expectations. You are.

Tell customers what they can expect when they become customers before they sign on the dotted lines or download a trial.

Pro tip: Don’t set customer expectations higher than you can achieve. Don’t under-promise, or over-deliver! However, you must set expectations. Customers will be happy if you exceed their expectations and they’ll stick with you for a long period.

21. You are a service and not a program.

SaaS providers are in a complex world. They must be both software and service. They cannot pretend to be both software and services. They must be both.

Why is it that customers continue to pay you each month? Because they know you are serving them. Is that possible? Is that possible? Are they aware of that? You will be much more successful in retaining customers if you can provide tangible service.

[Tweet: “Provide tangible service to retain customers. @neilpatel.”]

I recommend that you create a strategy for rolling out service improvements according to your billing schedule. Each month, the customer will see a payment being taken for their recurring bills. Customers need to feel that they are receiving something in return. Customers should feel that they are getting more value by increasing security or upgrading storage.

22. Add security features.

What are your SaaS customers most interested in?

You don’t need to guess. Vormetric found that security is a top concern for SaaS enterprise customers. SaaS is often criticized for its lack of security.

SaaS can be extremely secure. It’s up to you to show it to customers.

Customers want to know that you are actively protecting their data. This can be done by gradually adding security layers, then rolling them out and telling your clients.

You can increase customer confidence with each new security version. This technique can have diminishing returns, however. They may begin to question why you are increasing security. Is there a danger?

Changes must be made, including a complete disclosure that there is no threat. However, you will only make the necessary changes if necessary.

23. Release a new version. 

Customers will leave if they get bored.

Is boredom even possible in SaaS? Well, maybe. You can call it engagement or lack of interest if you wish. Customers who don’t see value in the product will eventually look for something else.

All you have to do to increase the value of your SaaS product is to release a new version. You must make it free and it should be automatic. It also needs to have meaning.

It is not a good idea to release a new version just for the sake of. Instead, you should release a new version to increase the value of your products and services for customers.

24. Upgrade the customer immediately

What would you think if you subscribed to Buzzfeed? It is a content analysis tool that allows you to share and analyze your content. For $99 per month, you were just plodding along at the pro level. It was a great plan, but you wished that you had the budget to pay for an agency-level plan.

You get an email one day from a BuzzSumo Vice President. He writes, “Hey, it seems you have been using Buzzfeed quite often.” We would like to upgrade your subscription to the agency level at no cost. The tool will give you a lot more power and a lot more mentions. I hope that you will find it useful. It is immediately effective.

That would be a great thing. I would even say you’d stay with BuzzSumo for a very long time. What was the cost to upgrade your membership with BuzzSumo? It’s probably not that much. Maybe a few pennies.

What did it do to increase your chances of being a customer forever? It was a lot.

It’s easy to turn people who aren’t interested in your products into enthusiastic advocates by surprising them with gifts and other delightful experiences. You not only increase your marketing but also increase your retention rate.

25. Customers should be able to easily leave.

Some customers will leave. This is a fact of life. Do not make it difficult for them. They will complain louder if you make it harder.

Sixteen Ventures’ article argues that customers are often not re-engaged after an obvious exit. Why? It all comes down to the message. You must make it easy for them to exit.

Here is how he explains:

You must also sell them the value of your offer upon exit. You must remind them why they signed up and what they will lose if they cancel. You should remind them again and again that if they cancel, everything is lost. Remind them to reconsider whether this is the right decision for them. They should also have a big button to cancel at any time.

It’s not something anyone likes to hear from a customer who cancels but don’t make it difficult for them. They’ll make a big deal about it and will be able to get out.

26. Conduct exit interviews.

If a customer is determined to leave, then so be it. However, can you speak with the customer before they leave?

Some customers may be so upset that they will not want to talk to you again. Some customers will be more open to answering questions and chatting over the phone. Your goal is not to win them back. Don’t even try.

Instead, try to understand why they have left. This information can be used to improve your process and provide more value to your customers.

27. Each customer should be assigned a retention specialist

I suggest that you establish a customer retention department. You can also assign each customer to a retention specialist to take it a step further.

This technique works well if you have several clients who pay a high price. Customer retention specialists are people whose job is to communicate with clients regularly. Although they may not be able to answer technical questions in depth, they can keep customers satisfied.

It’s too late for a customer to be on alert. Care and relationships must be established long before this point. Customer retention specialists will ensure that this care and nurture is maintained.

Conclusion

SaaS businesses must retain customers. You don’t have to be reliant on luck or chance. There are things you can do to reduce the churn rate.

Choose one strategy from the list. You will see an increase in retention rates if you keep your eyes on them.